HSBC Set To Reveal Huge Profits And Bonuses On Monday

26/02/2012 12:52 GMT
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Updated
27/04/2012 10:12 BST

PA

Profits of more than £14 billion and a pay package worth up to £12.5 million for its chief executive are set to be revealed by HSBC tomorrow.

City analysts estimate that profits for 2011 could hit 22.3 billion US dollars (£14.1 billion), which would be among the biggest ever reported by a British company and close to its record of 24 billion US dollars set in 2007.

Chief executive Stuart Gulliver could be awarded a total package worth up to £12.5 million as his £1.25 million salary will be boosted by a £3.75 million bonus and long-term incentives potentially worth up to £7.5 million. The final element will be in shares and cannot be sold until he retires or leaves HSBC.

The banking giant makes an estimated 90% of its money outside Britain and has benefited from its exposure to emerging markets in Asia. It is expected to say that it will focus its efforts on growing economies such as China, while maintaining its market share in lower growth areas such as Europe.

Its British operations are expected to show flat profits for 2011, while its American arm continues to suffer the fall-out from the acquisition of sub-prime lender Household in 2002, reports today said.

Barclays, RBS and Lloyds have already said that they have cut their bonus pools amid falling profits, though it remains to be seen whether HSBC will follow suit by reducing pay at its investment banking arm.

In 2010, it paid its 295,000 staff some 19.8 billion US dollars (£12.6 billion), while its highest paid banker was paid between £8.4 million and £8.5 million.

But it is under less pressure to act because it did not need to go cap in hand to taxpayers in the financial crisis. Its profits are likely to be more than double the £5.9 billion reported by Barclays earlier this month.

The bank is also expected to reveal the pay for its top eight executives, in line with new disclosure rules due to come into force later this year.

And it will reportedly create hundreds of millions of pounds of new shares, which it will sell on the market to fund the cash element of larger bonuses for UK staff.